Joshua Raymond, Market Strategist of spread betting provider City Index, gives his overview of the financial markets for 3rd September 2010

Greater London, England -- (SBWire) -- 09/13/2010 -- Joshua Raymond, Market Strategist, City Index commented:

“Stocks received a boost on Monday after the much watched Basel III meeting over the weekend gave the market any real surprises on capital requirements, whilst the rather long adjustment period is also breeding confidence that banks will not be forced into any large scale capital raising in the short term.

Chinese data lifts miners
Data from China early this morning which showed that Industrial Production surprisingly grew by a large amount in August has boosting hopes that a slowdown in the world’s fastest growing economy is not likely to happen anytime soon. Industrial production bounced back from a slowdown in July to grow by 13.9% in August when much of the market had expected another slowdown. The knock on effect has been a surge in the share prices of key commodity stocks with Xstrata, Kazakhmys and Anglo American all posting strong early gains.

It is the relatively good news from the Basel III ruling and bullish Chinese data that has lifted European markets today, triggering heavy gains in the heavyweight banking and mining sectors which have in turn charged European Indices to new 4 month highs.

Prudential jumps on M&A talk
M&A activity continues to trigger individual stick moves with Prudential the latest reported bid target after the Sunday Times reported that a Chinese group are in the early stages of a takeover attempt. The news has lifted Prudential shares to a new 8 month high.

Primark sales disappoint
On the downside however, we have seen traders sell out of their shares in Associated British Foods, after the retailer said sales slowed over the summer at its cheap and cheery Primark stores and warned of lower profit margins next year. The slowdown in Primark sales and cautioned outlook is alarming as one would have hoped that its low cost items would continue to attract consumers, particularly with the impending massive public spending cuts to come. Shares have fallen by as much as 3% today as a result of the slowdown.

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